THE PROCESS OF CIRP IS NOT AN ESSENTIAL TO INITIATE IRP AGAINST THE PERSONAL GUARANTOR: NCLAT. In the case of State Bank of India vs. Mahendra Kumar Jajodia, the financial creditor State Bank of India filed an appeal before National Company Law Appellate Tribunal (NCLAT) against the order of NCLT- Kolkata Bench which refused to entertain an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 for initiation of Insolvency Resolution Process (IRP) against the Respondent/ Personal Guarantor, on the ground that initiation IRP would be early as Corporate Insolvency Resolution Process (CIRP) has not being initiated against the corporate debtor yet. In this case the NCLAT observed that according to section 60(1) of IBC the adjudicating authority for the corporate persons including corporate debtors and personal guarantors shall be the NCLT, whereas section 60(2) states that where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution of the Corporate Guarantor or Personal Guarantor as the case may be of such Corporate Debtor shall be filed before NCLT. However, Section 60(2) is applicable only when CIRP or Liquidation Proceeding of a Corporate Debtor is pending, when CIRP or Liquidation Proceeding are not pending against the corporate debtor there is no applicability of section 60(2). Therefore, NCLAT set aside the order passed by NCLT- Kolkata Bench and held that initiation of Corporate Insolvency Resolution Process is not a prerequisite to initiate IRP against the Personal Guarantor of the Corporate Debtor. Reddy and Reddy Law Firm provides a wide range of corporate legal services ranging from incorporation to winding up and all the legal compliances related to it. We are regularly involved in representations before NCLT, NCLAT, DRT, DRAT and other commercial tribunals in India.